In Detail: How to Claim the New Home Buyer Tax Credit on 2009 Tax Returns

In November of last year, President Obama and Congress expanded the home buyer tax credit to cover more people who have purchased houses in 2009 and 2010 and to further stimulate the real estate industry. Earlier this month, the IRS released an updated tax form to include the new rules. If you want to claim the home buyer tax credit, you must file your tax return on paper. You will not be able to electronically file because the IRS requires additional documentation.

Here is what you need to know in order to receive the full tax credit offered by the government.

How to qualify for the home buyer tax credit

Both first-time home buyers and long-time owners can qualify for a credit. A first-time home buyer for the purposes of the credit is someone who has not owned a home (or whose spouse who has not owned a home) during the three-year period that ends on the date of purchase of the new home. If the house was purchased on November 30, 2009, to qualify you must not have owned a home since December 1, 2006. The earliest date to qualify for this credit is January 1, 2009.

To qualify for the credit given to long-time home owners, you must have owned your current home for any five five year period during the eight year period ending on the date of purchase of the new home. The earliest home purchase date to qualify for this credit is November 8, 2009.

For either credit, if your date of purchase is in May or June 2010, you will need to prove you entered into a contract to buy the house before May 2010. Read below to determine what documentation is necessary.

Members of the military and the “intelligence community” have an extra year to purchase a house and qualify for the credit.

Restrictions for qualifying for the credit

Even if you qualify as a first-time home buyer or a long-time home owner and you have purchased a qualifying house within the permitted time frame, you might still not qualify for the credit. You will not qualify if:

you purchased your house after November 6, 2009, the price of the house may not be more than $800,000

your modified adjusted gross income is $95,000 ($170,000 if you are married filing jointly) or more and you purchased your house before November 7, 2009. A phase-out of the credit begins with a MAGI of $75,000 (or $150,000)

your modified adjusted gross income is $145,00 ($245,000 if you are married filing jointly) or more and your purchased your house after November 6, 2009. A phase-out of the credit begins with a MAGI of $125,000 (or $225,000)

someone else claims you as a dependent on their tax return

you purchased your house after November 6, 2009, and were under the age of 18 on the date of purchase

you are a nonresident alien

your house is located outside the United States

you sell your home or it ceases to be your main residence before the end of the year in which you purchase it

you received the house as a gift or inheritance

you acquired your home from a relative or a related corporation or partnership

The amount of the credit

First-time home buyers qualify for a credit of 10% of the purchase price up to a maximum of $8,000 ($4,000 if married filing separately). Long-time residents qualify for a credit of 10% of the purchase price up to a maximum of $6,500 ($3,250 if married filing separately). As mentioned above, if your modified adjusted gross income is above a certain level, the credit will be phased out until eliminated entirely.

How to claim the tax credit

Because the IRS requires additional documentation, taxpayers who wish to claim the home buyer tax credit must file federal tax returns on paper through the mail. You can, however, still use tax preparation software like H&R Block At Home (formerly TaxCut), TurboTax, and TaxAct to calculate your taxes and complete your return, but you will need to print the paperwork and send it in.

Yes, TurboTax will stop taxpayers who have claimed the Homebuyers Credit from e-filing and let them know that the IRS requires them to print and mail their return with the appropriate documentation.

1. Download and complete the revised Form 5405. This form is available here. The form will guide you through the process, ensure you qualify for a credit, and determine the amount of your credit. Alternatively, prepare your taxes online, ensuring your answer questions about your home purchase correctly.

2. Collect your required documentation. You will need the Form HUD-1 Settlement Statement or other settlement statement outlining the names and signatures of all parties to the sale, the property address, the price, and the date of purchase. If you do not have a settlement statement, as you might not if you purchase a newly-constructed home, attach your certificate of occupancy.

If you are under contract but have not taken occupancy of the house by the time you file your taxes — and you still qualify under the date restrictions above — include pages from your signed contract including the signatures and names of all parties, the property price, the address, and the contract date.

If you qualify as a long-time homeowner rather than a first-time home buyer, include Form 1098 (Mortgage Interest Statement), property tax records, or homeowners’ insurance records. The forms must cover a full consecutive five year period within the eight years ending on the date of the purchase.

Be sure to send copies of these forms, not the originals.

3. Complete your Form 1040. Include your bottom line on Form 5405 on the appropriate line on your income tax return. On the 2009 Form 1040 return, this is line 67. You can’t claim this credit with Form 1040EZ.

4. Double-check your work. Check for the most common mistakes, such as not signing the return or using the wrong Social Security number. Review each form line-by-line and check your calculations. Any mistake will cause a delay.

As first-time homebuyers in 2009, we will be claiming the $8K credit on our taxes. This is an excellent breakdown of what you need to know about claiming the tax credit.

I’d just like to add that you should send in a COPY of your HUD-1 settlement form and keep the original. The note at the bottom of Form 5405 and the wording on page two of the Instructions says to “attach a copy of the properly executed settlement statement” or copies of the contract pages showing the signatures. I don’t advocate sending in original paperwork!

I’ve been getting conflicting information about what does and doesn’t count as a ‘home’ for the first time home buyers credit and I need some clarification for my situation. Does a mobile home that you own but that you do not own the land it is on qualify as a ‘home’?

I purchased a new home in July of 2009 to accomodate my growing family. We had been living in a mobile home we purchased in 2006 and rented a lot for it. Both my loan officer and the branch manager where I got my mortgage for the new home told me that I could get the tax credit because I did not own or lease the land that it was on. I have been trying to find supporting information to back their claim up before I go getting myself into a load of trouble with the IRS but haven’t found anything that clearly spells this out.

While I would love to qualify for the credit it wasn’t the reason I purchased a new home and it won’t destroy me to find out that I can’t get it. I would just like to have something concrete to base my tax filing this year.

This is still somewhat confusing to me. My husband I and are living in the mobile home we purchased in 2000. We rent the lot on which it is placed. We are now in contract to purchase a new house (which is not a mobile home.)

We know that we qualify for one of the two credits (we meet all the other requirements,) but the question remains — which one? We have been told that because a mobile home is “personal property” and not “real property” that we qualify for the first time buyers 8,000 credit. However, we aren’t sure if we were given correct advice on this, as there is so much confusion on this subject.

So, do we qualify for the first time buyers 8,000 credit or for the long term owners 6,500 credit since the mobile home we bought 10 years ago (and still live in until the close of our new home) is on a rented space in a mobile home park (rather than land that we own?)

I actually ended up calling the IRS on this one. Mobile homes count both ways. What I mean is this: if you purchase a mobile home on rented land (such as a park,) you are eligible for one of the tax credits as long as you meet all of the other requirements. Also, if you sell your mobile home (if it’s your primary residence) to move into another home (which will be your primary residence,) you are eligible for the long time credit (up to $6500) as long as you meet all of the other requirements. So, owning a mobile home on rented land that is your primary residence does as being a current home owner. Under this circumstance, you should not take the first time credit of up to $8,000, but instead claim the $6,500 credit. The representative from the IRS explained that as long as you own the home in which you are living, you are a current homeowner. He further explained that this includes mobile homes, house boats, trailers or any other structure that you own and use as your primary residence, whether it could be classified as personal property or not.

how can they call it a home if it has a car title if i lived in a van down by the river for the last five yrs. your saying i still dont qualify as anew home buyer i hate the irs also i was told that if thats true i still cant get the 6500 cuz i bought my house 1 month early in 09 i thought it was anytime in 09 i was told when i bought it i was getting the 8000 they even showed me what papers i needed for it then i went to do my taxes and was told they didnt think i could get anything

geoff

I’m still a little confused (and possibly a bit peeved). We bought our house on October 1, before the law was updated. Do we need to do the paper form? Taxact seems to be ok with how I entered the info but I want to make sure we get the money.

If I did that work to buy before the extension, I’m going to be peeved that I have to wait 6 to 8 weeks for my refund check just because they changed the law.

TaxAct will let you electronically file, warning you only if the purchase was made after November 6. If the purchase was made after that date, Tax Act says:

For a home purchased after November 6, 2009, documentation is required to support the homebuyer credit. If the documentation is not furnished with the return, the credit will be disallowed. An example of the required documentation is a properly executed copy of the settlement statement used to complete the purchase.

This indicates that you must file through the mail regardless of the date of purchase. I took a look at TurboTax, too. A trial run-through with TurboTax doesn’t seem to indicate I need to file through the mail, but according to a TurboTax representative:

Yes, TurboTax will stop taxpayers who have claimed the Homebuyers Credit from e-filing and let them know that the IRS requires them to print and mail their return with the appropriate documentation.

I would say it is likely the IRS will reject your tax return if you file electronically. You can always print out your forms with TaxAct and mail them in rather than doing everything by hand.

Daub: Assuming you’re amending your 2009 taxes because you won’t have the paperwork by April 15 and won’t be buying until after that date but before the deadline, you should be able to e-file now, but you’ll need to file an amended return by paper to include your documentation.

About how long did it take for you to recieve your Credit back? I filed mine a week and a half ago and I am just trying to figure out when I should be getting it back. Estimation is just fine with me!!! :)

My husband and I bought a house in September/2009. The HUD Statement has my husband’s name only. We will be filing ‘married separately’. Can we both claim the first time homebuyer credit, even though, the settlement statement doesn’t have my name on it?

Mike, Do you know if this true. I am in same boat. I am married filing jointly but my HUD -1 statement carries only my name (and not my spouse’s). However my “Deed of Trust” has both names. Let us know if you found anything on this context. Thanks

RFDGuy: That’s unfortunately correct. Relatives include your spouse, ancestors, and descendants. If you purchased after November 6, 2009, relatives also include your spouse’s ancestors and descendants.

Our house was in a Trust fund to my husbands grandmother. Does this mean that we can’t get the credit also. I was understanding it since it was in a Trust fund that it was not actually owned by her. We do make the payments to her. How would we get a settlement statement for it if we are able to claim it.

We’re building a house on land we purchased three years ago. Building with our own bare hands, and frantically trying to make the deadline for a Certificate of Occupancy. I can’t seem to find out whether the CofO need to be dated April 30th, or can we stretch it until June? Thanks!

I have the same exact question. How do you enter into a binding contract by 4/30/2010 if you are your own general contractor. Our holdup to being able to move in right now is due to work that is being subcontracted (cabinets, remaining plumbing & remaining electric). Do we just get a signed contract by 4/30/2010 with these subcontractors showing the work will be completed and we will be ready to move in before 6/30/2010? Please let me know if you find out the answer as I can’t find anything to support what to do in this case. Thank you.

Hi, TLR. I finally got an answer from the IRS about this. Boy is this a good news/bad news answer. The good news is that the date is 6/30/2010 if you’re building your own place and don’t have a contract.

The bad news is pretty bad, though – at least for us. While I had them on the phone, I asked another question: since the house won’t be appraised until July, do I just file an amended return once I know the value of the home? Our place is certainly not going to end up being valued at $80,000 – more probably in the $60-$70K range, and the “$8,000 tax credit” is actually 10% of the purchase price, up to $80,000. So it has to be appraised before I know how much to claim, right?

Wrong.

Why? Because people who have built a home with their own two hands don’t get to claim that the finished product is worth the market value. According to Publication 551, we get to claim that the finished product is worth the cost of the concrete, nails, and plywood we put into it, plus any labor we paid anyone else to do for us. It specifically warns:

“Do not include the value of your own labor, or any other labor you did not pay for, in the basis of any property you construct.”

What we may include is:
– Cost of the land.
– Cost of labor and materials.
– Architect’s fees.
– Building permit charges.
– Payments to contractors.
– Payments for rental equipment.
– Inspection fees.

I have been building my own house for the last few years. We still don’t have our Certificate of Occupancy. Is that all we need to do to qualify for the credit???
Does anyone have the secret to how you get in touch with a human at IRS? I’ve spent so much time in the automated phone system today and still haven’t found an option to speak with someone to clarify my questions.
Thanks in advance for any input you can share!

I am single and bought my first house 8/14/09. Because my AGI is slightly more than the 95k, I do not get any of the tax credit, yet if I bought it 3 months later I would have received $8,000. Is there any way to over come this? Do I have any options?

purchased the house on nov 6th of 2009. decided to wait to claim the credit on my 2009 return. went to someone to prepare all of this for me. the person only asked if i was able and had the proper “proof of purchase” if necessary which i do have everything in a giant green folder but she did not say that it was REQUIRED to send it in. i just mailed them both in today like 20mins ago… should i already be prepared to get a “need more information” letter from the IRS?

My settlement statement provided by the title company is not signed by any parties. Neither is the copy my bank has. Does anyone know if I can send the transfer deed and deed of trust instead? It provides all the information requested. Where is the IRS getting the authority to require the settlement statement? Is it just an IRS rule?

We have the same problem. Despite my pleas with my Escrow Company, they don’t want to give me a copy of the HUD 1 that bears all the signatures of the parties. It just reasoned out that my seller ( Freddie Mac) doesn’t want to divulge all the fees it paid. I have no recourse then but to send in (by mail) all copies of the documents that evidenced our purchase of the house, ie Purchase contract with all the addendum thereto, Grant Deed, Bank Statements, Loan approval, Form 1098, Income tax returns for the past 4 years ( to show we never claimed a mortgage interest, hence first time home buyers) and even utility bills that will prove that we are currently using the house as our residence.

I pray to God I did the right thing in sending all the above documents. Hope too that this will help you.

To the IRs people, they should not require an exclusive document to prove entitlement of the tax credit. Some people who works in the government might only interpret the new requirement literally. Inasmuch as the rule require the submission of the HUD 1, whoever gets the assignment of our refund might just expect such document and in the absence thereof, they will just return our claim. IRS should think that there are other evidences of house purchasing, documents that shows the purchase price, the signatures of the parties concerned etc.

Hello Rich! It was an Escrow Company that handles the closing. I called up all the involved parties in the transaction but everybody referred me to the closing agent. Nothing can be done there so I gave up. I did the best I thought would serve my purpose. Send in those documents I mentioned in my earlier comment.

Anyhow, I have my HUD 1 but this paper I have contain only my side of the settlement, without the sellers part. What I have reflects the property address, Escrow number, my Loan No., purchase price and all the items I paid and of course my name as buyer. The question now is whether this kind of HUD 1 I have would be enough for IRS to give me my $8,000. If not, would I be allowed to present other documents that will validate my claim for the tax credit.

But I just read in one of the comments above that copy of the sales contract will suffice. I mean, in lieu of the HUD1, the claimant of the tax credit can instead send in the purchase contract. This one is logical.

To Adam, are you somewhere on the East side? I asked because some States have this same HUD1 format. I mean, this same dual settlement and each party to the contract sale would only get his/her side of the settlement. If so, check with your local IRS. I’m pretty sure they have a good answer for your problem. And if you get one, please share it with us. there might be numbers of us who have the same predicament.

They are required by LAW to give you a copy of your HUD-1. Luckily, I had a former loan officer as a relative, and they guided me through my closing and kept the sharks in line. But you need that statement and you are entitled to it. TIL Truth in Lending.

Scoop

Adam, I have the same issue, but what i did was Call the attorney that was handling the foreclosed Fanny May property and they were very helpful in sending me all of the closing documentation signed, including the HUD-1. I’m not sure who handled your closing but that’s the only way i can see you getting one executed as per the guidelines.

Or like Tyrel mention send them everything, look up your property on the county tax collector website and print out the information showing that the home was sold and registered under you name from a previous owner in 2009.

They are requiring the HUD-1 to fight fraud. I read that 90,000 people filed false claims for this credit. That’s a lot of money lost if they were to receive it. I don’t think it’s too much to provide our settlement statement if we’re getting $8,000. It’s not like the government is going to sell all your information to third parties (a la Facebook).

I am closing in feb 2010 on condo in Florida, but still living in new York. I am planning to move down into the condo within a couple of months once I get everything ready. Would this be an issue claiming the credit because I am not immediately moving in?

I recently purchased my first home, a manufactured home on a rented lot. I am a trustee for the home I have lived in for years for my late Dad’s grandchildren and pay all the expenses , taxes , insurance and utilities. Do I qualify as a first time home buyer since the other home I’m moving out of has me listed as trustee for the property?

I purchased a home right after November 6, from what i am hearing the delay can take up to 4 months to receive a refund after the IRS verifies that you are the owner and a first time home buyer. My question is, I am expecting in addition to the Home Tax credit my usual refund for EIC, Child credit etc… can i e-file my 2009 taxes without the inclusion of the home credit and after i receive my refund amend my just filed 2009 tax return to include the Home Tax credit?

I filed my 2009 return, received my refund and amended my 09 return after that to claim the credit. I hadn’t originally intended to do so…I took everything to a local Jackson Hewitt and the lady amended my 2008 return first…Sent it in and they sent it back. She hadn’t used the correct/updated form 5405 so I amended my 2009 return myself. Worked out better for me, got my normal portion of my refund electronically and am now waiting like everyone else. I would have been in a mess of trouble had the homebuyer credit tied up my normal return!

Why are people who bought homes from relatives excluded? What breaks did we receive? We had to take out a mortgage and go through the very same process as everyone else. We didn’t get any incentives whatsoever…so why are we excluded? What is the reasoning? I can’t seem to find any rational explanation for this.

Easy, you do not push the market up. It’s very reasonable to believe you would have bought from your relative with or without the credit. Unfair? Sure, but they want to have the effect that people that maybe wouldn’t have gone out to buy would.

So we closed on our home July 31st 2009. We would qualify for the long term home buyer credit except for the date. I don’t get it! So not fair that we bought our home 2months to early. Is there any way around this?

We qualify for the credit only if we use the new guidelines for income level (set Nov 6). We closed on our home Nov 6 and the title was recorded in public record the following Monday (Nov 9). Can we still claim the credit or did we miss it by one day??

I have the same issue as Patricia. I closed on my new home Nov 6 late in the day (4:27 timestamp was on the settlement) The deed and title were not filed until the following week. I also needed the new income level to qualify. The new guidelines were signed Nov 6th. Is there any way to get the credit or do we really lose because of one day.

My mom bought a house and put my name on the loan and 2nd on title incase something ever happen to her. She lived in the house and years later I put a trailer on the land. In 09 I bought my first house. I do have a 1st time home owners loan. Can I get the rebate?

In California and Washington State the HUD-1 settlement statements are not signed by anyone it is not required nor done. So i contacted the Irs twice, first response was ” Then I’m afraid you won’t be able to claim the credit.” The second response was “try sending in your deed and well see if they will except that.” This is a joke, will they or won’t they? I don’t want to be stuck in IRS limbo. What will they except?

Hi Kevin! The first person you talked to from the IRS has a big personality problem, so try to understand his stupidity. The second one, kind of in the middle which in essence needs understanding too. Anyhow, I have no legal authority to answer your question but I have my own personal view which I hope would help you.

There was a law that was passed granting all first time home buyers tax credit. Since the subject of such law involves taxes, therefore the IRS is the implementing agency. And because fraudulent claims are so rampant, IRS promulgated the rules asking the claimants to send HUD 1 to validate their claim. Unfortunately, the IRS didn’t foresee the fact that not all HUD 1 forms are the same. As you’ve said, HUD 1 in California (where we both live) are not signed by the parties. Bottom line, the IRS cannot prevail over the mandate of the law. The law gave us first time home buyers a tax credit of so much, and only another law can take that privilege from us. The IRS instructions are mere instructions to implement the law, as such IRS itself can always change their implementing rules and guidelines to better suit the spirit of the main law it is mandated to implement. Not the other way around because to do so means the IRS becomes another legislature and not mere implementing agency.

Anyhow, I called up IRS and the person I talked to said I can send any document that will prove my claim. He mentioned the purchase contract since this document shows the parties to the contract, their signatures, the purchase price and all other stuff you normally find in the HUD 1. In addition to the purchase contract, I also attached other documents.

From the IRS:
Filing Requirements
2009 Tax Return
Because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic — return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit (see the instructions for help with the form), and a properly executed copy of a settlement statement used to complete the purchase.
• Purchasers of conventional homes should include a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties’ names, property address, sales price and date of purchase.
• Purchasers of mobile homes who are unable to get a settlement statement should include a copy of the executed retail sales contract showing all parties’ names, property address, purchase price and date of purchase.
• Purchasers of newly constructed homes where a settlement statement is not available should include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
Note Regarding Signatures: While the Form 5405 instructions indicate that a properly executed settlement statement should show the signatures of all parties, the IRS recognizes that the elements of the settlement document, often a Form HUD-1, may vary from jurisdiction to jurisdiction and may not reflect the signatures of the buyer and seller. The settlement statement that must be attached to the return is considered to be properly executed if it is complete and valid according to local law. In locations where signatures are not required the IRS encourages the buyer to sign the settlement statement prior to attaching it to the tax return even in cases where the settlement form does not include a signature line.

Thank You! Yours is the first straight answer I have heard! I did send in my deed, my tax bill, my hud-1 which I signed, and about 10 other documents to prove i’m in the house and bought it. I have my fingers crossed. Again Thanks!

I have the same issue with H&R Block online. I bought my home in March 2009 and claimed it on my return last year. I didn’t have to send in any documentation and was able to e-file. I received the $8000.00 as a wire straight to my bank and it came really fast. The version of tax software I am using imports the previous year’s info as well. The problem is, it is also letting me claim the credit and does NOT ask if I’ve already claimed the credit. I even looked up form 5045 and it doesn’t have a space to state you already claimed it. Is this just the IRS wanting my HUD statement so they are letting me claim it again, only to later find out that I don’t get the money again? I don’t expect the money, however the online software should really be updated to ask if you have already claimed the credit so that we don’t get false hope!!!

I purchased a home in October 2009 with my fiance. I do not qualify for the tax credit since i owned my home previously. she however does qualify. i checked on irs.gov and found this to verify she can claim the maximum credit:http://www.irs.gov/newsroom/article/0,,id=206294,00.html

the problem is how should we file?
she was claimed as a dependent by her parents in 2008 so she can’t claim it there.

I would like to file “married filing jointly” but if we did would she still be able to claim the credit?

if we file “married filing seperately” how do i answer question 3 in part 2 of Form 5405? since according to irs.gov she qualifies for the maximum credit.

Line F on Form 5405 is confusing because it conflicts with the instructions sheet.

Line F states, “If you are choosing to claim the credit on your return for the year before the year in which you purchased the home, check here (see instructions)”

……The Instructions for Line F state, “Check the box if you are making one of the following choices.
-You are choosing to claim the credit on your 2008 original or amended return for a main home purchased in 2009.
-You are choosing to claim the credit on your 2009 original or amended return for a main home purchased in 2010.”

So I purchased my home in 2009, and I want to claim this on my 2009 taxes, do I check the box???????

Hi, Here’s what I have. I live in Maui,Hawaii and I’m renting. I just bought a home in Dahlonega, Ga. My wifes is an editor for a wedding magazine here in Maui but will be able to do her job online from Dahlonega, Ga. I have a commit here where I can’t leave. Our new home loan is based on our Maui income. I guess here is the question. Can my wife live in the new home full time still working for her Maui employer and myself live in Maui and still get the $8,000.00 tax credit? Hope I made sense Thanks in advance.

i closed on my house on nov. 4th 2009. i waited until i had my 09 taxes done to claim my home buyers credit. am i going to have to wait months and months for my actualy income tax return because of this? or is there any way to get my refund now and get my $8000 whenever it gets approved

I just bought a house, the closing date is March 4, 2010. My parents claimed me as a dependent on their 2009 taxes because I was, but since I made the purchase in 2010 how will I receive the tax credit? Do I have to wait till I file my taxes for 2010 as an independent to get the tax credit in 2011? Is there any way to get it any sooner?

We already sent in our tax forms for 2009 and claimed the homebuyers credit, were only getting back a small part cause we didn’t pay much for our mobile home but the lady who done our taxes told us to send them off and she never asked us to attach any other forms so what do we do now? will we have to have them amended? Thanks for any info.

hi,
I have never owned a home, but my husband has for the past 10 years, we just recently sold the home he owned and just signed a contract together for a new home. My question is… can I claim the credit as first time homeowner in addition to him claiming the credit as a previous owner?
Thanks
stacy

Hello!
Flexo – great info on this site – thank you!
My question is this: My husband and I bought our first home in June 2009. We spent 4+ days doing our taxes on Turbo Tax with a financial advisor. We checked, double checked, and triple checked all our forms, entries, attached required forms, etc. We had taken money from an IRA to help pay for the down payment (as is allowed for first time home buying) and had to pay over $3000 in tax on the $7000 we withdraw (I swear we must have OVER paid). It’s been aboutt 4 weeks since we mailed everything in and there is no word on our status or anything. We mailed it to the local Austin IRS address (and, yes, we’re concerned it may have been processed in the IRS building the plane was flown into last Thursday). How long does it usually take to get the refund back. Though we’re only getting a portion of the full tax credit back (thanks to the taxation on the IRA withdrawl) we were lied to by both our realtor & inspector and have had to pay thousands to get the house’s plumbing and electrical up to code: i.e. we need that tax credit! We’ve been hearing horror stories that getting the home buyer credit tax return is taking in excess of 4-6 months and that the IRS won’t even start processing the 2009 returns until mid-March. Has anyone else heard anything like that? Is there any truth to any of that?
Thank you!

I purchased a home with my boyfriend in September 2009. We qualify for the first time home buyer tax credit. My question is about filing for my taxes. One big stipulation of the tax credit is that we provide “proof of residency.” I have looked everywhere, but no websites specify what kind of proof we need to provide. Our driver’s licenses show our old addresses, not the address of the house that we just bought. Can we show other proof of residence such as current bills that are sent to our house instead? Thanks!

Normally proof of residency can be established with an electrical bill. I would go get new driver’s license’s (you normally only have 30 days in which to legally change this), and the driver’s license along with vehicle registration for the new address along with an electrical bill should suffice.

I purchased a small home in December of 2009. I was very disappointed to find that I am not eligible for the repeat buyer tax credit because I had not owned my previous home for 5 years. I had purchased my previous home in February of 2007 and had to sell it in June 2009 due to the economy. I had owned another home before that for 4 years. I own part of a small business and the faultering economy has hit us hard here in the northeast. I lost some money on the sale of my previous home. I figured it was better to take the bull by the horns and sell before it got to the point I was unable to keep up with mortgage payments. I had hoped to gain some benefit of this goverment program when I purchased my new home. Although I did not purchase this new home in order to take advantage of the tax credit, it would have been a nice bonus and taken away some of the sting of the loss on my previous home.

I’m unclear as to why there is a 5 year requirement for previous ownership. Anyone have any idea? Since this country’s screwed up economy and banking fiasco forced me out of the house I previous loved, I was hoping it would give something back when I was able to purchase a new one. It seems like the credit should have been offered to everyone purchasing a home in order to stimulate real estate sales and economic growth. But such is life. At least I have a new home and a job, and that’s more than some people can say in this country. Hopefully, 2010 will better for everyone out there. :-)

I understand your situation as i’m in my house 4 years. I’m lucky to have made it throught the economy and still have my house, but as with everything I believe they needed a cutoff. My personal thought would be that if you’re in residence for 5+ years you have enough equity in your home to not be upside down. I’m not saying this is always the case, but majority makes the rule in most cases. The one thing this credit is not looking for is to further depress the economy.

My wife and I bought a house in August 2009. The HUD Statement has my name only. We will be filing ‘married separately’. Can we both claim the first time homebuyer credit, even though, the settlement statement doesn’t have her name on it?

Well then that doesn’t make sense. If you’re filing separately and you’re only allowed to claim $4000 then I don’t know what other choice you would have (aside from filing jointly). If the instructions don’t say that both names have to be on the HUD-1, then I would assume it’s not required, but I don’t know. No wonder Joe Stack had so many problems.

I think I’m sort of in the same boat as Mike. I’ve always handled my taxes on my own, with no problems ever, but this year has me a little confused. I just did a Google search for my question, and it lead me to this site. Seems like a lot of good advise on here, so I’ll start my questioning here, perhaps someone will have a definate answer!

I purchased my first home in June 2009, and got married in October. We’ve gotten advise that it is definately in our best interest this year to file as “married filing separately”, because of certain situations involving her college student loans. But that had nothing to do with the first time homeowners credit. If I file as “married filing separately”, I can “only” get $4000. Now my question is, even though we were not married in June, and my name is the only one listed as the purchaser, can she also claim to be a first time homeowner, and also get the $4000 on her “married filing separately” return? Thanks in advance, TJ.

Sam

I just entered into a contract to buy my first house on February 21. The closing date is not until April 23. According to this article I can send in a copy of my signed contract with my tax return and still receive the credit. I just wanted to verify that I understand this correctly. Or am I wrong and I will have to wait until my closing which is after the April 15 tax deadline.

I am also wondering this as my close date is April 30th. I can find nowhere on the IRS website that says that you can use a binding contract but did find somewhere that they referenced “other signed proof of home transfer” I am thinking of just filling for an extension and turning it in with our HUD-1 settlement statement, but if I could get this earlier it would be even better, so I would love to hear a definitive answer!

From my research, and just looking at Form 4868, which is the form for an extension, it does not even ask you for a reason. Instead it grants an automatic 6 month extension. That said, if you are going to owe anything, you must still pay by the normal April 15th deadline. But this looks to be the way to go unless someone can confirm that they will take a signed purchase agreement.

I also have the same situation. My wife and I just entered into contract on a house. We will be settling on April 30, 2010. I would love to claim the credit now by sending in a signed contract rather then waiting for the HUD-1 settlement statement.

Can anyone offer some insight? Can you send in a signed contract instead of a HUD-1 settlement statement? I would just like to get the ball rolling on this 8k.

Thanks!

Linda

This rebate is not clear so everyone can understand it. It says buy a house and when you do, you are not qualified. There should have been more detail with the rebate came out. I thought I was getting the $8000 rebate but when I filed my taxes, I was told I was not. It’s so misleading!

my husband bought a condo in Sept 2009 from his mother. Does he not qualify for the tax credit refund because it was bought from a relative? If thats is true, thats is crap, because no one ever said that it cannot be a relative. We found out now when we filed our taxes.

The stipulations were available to the public. Posted all over the websites (easier ones to find than this one) and generally available. Your real estate agent should have advised you to ask a tax professional before signing. Personal responsibility goes a long way to avoiding crap.

I purchased a house in Dec 2009 from my mother in law. I am married but my wife is not on the loan or the deed. We do file married joint. The IRS site states you can not claim the tax credit if you purchase from a relative. Does that count if my wife wasn’t the one buying it as well? The site lists the following people that if you purchase from, it exempts you: Your spouse, ancestors (parents, grandparents, etc.), or lineal descendants (children, grandchildren, etc.) and none of these apply to me. Does anyone know if this is in favor for me? Any and all info would be greatly appreciated!

I bought my house as a bachelor Aug 2003…my fiance moved in with me Oct 2005…we were married in Oct 2006…we never changed the ownership of the house it remained in my name only…we did refi and added her o th ebank note in 2008.

we bought a house together in Feb of 2010 and it is the primary residence…we have not sold old house yet.

I am 100% confident I qualify for the Step up credit but I fear we will not qualify togehter b/c my wife never owned the house and technically only lived there for 4.5 years…thoughts? anyone in this situation?

Hi, we just signed a contract on a home and we are going to close 28 May 2010. We had to move to accept new positions. We are in the process of “trying” to sell my previous home that we lived in as a primary residence for 9 years. It has been rented since Jan. 2010. Are we eligible for the repeat home purchase tax credit even though our previous home has not sold yet? We will be utilizing this home as our primary residence.

There is nothing that states the home has be be sold to qualify for the tax credit.

Main definition for years has been the residence you spend the majority of the time in. This only becomes an issue in areas where people have summer/winter homes and equally spread their time around.

To avoid any complications I would send in a copy of the rental contract for your previous home showing you are no longer the occupants of it (utility bills if they are in the name of the renter will do as well) and I would provide the same as utility bills or any federal mailings you have received.

I don’t know if we qualify for any housing credits or not. One friend says we do, another says we don’t. Here’s the deal. We had owned a previous home for over 10 years. We purchased a new home on Dec. 6, 2006, and moved in there in January of 2007. We are still living in this home and do not plan on moving. Do we qualify for any housing credits? If so, how do we claim them?

Your article was very helpful. I filed my 2009 tax return before the completion of the purchase of my house. Do I need to fill out a 1040X in addition to Form 5405? Form 5405 seems relatively simple, but I don’t see where to reflect the difference on 1040X. Thanks for all your help.

I helped my son file his taxes on TaxACT and he will be getting the $8000 home buyers credit. What we didn’t catch was that along with form 5405, we had to send in the HUD settlement statement. The IRS has finally acknowledged receipt and claims that he should receive his refund by May 4. I know that that will probably change, but my question is should he send in the copy of the HUD statement now and not wait until hearing from the IRS that they need more documentation? Or just wait and see if they have enough info? How would he send it in if it’s just an addition to his filing not amended? Thank you

Okay, after a bit more research, I looked on TaxACT and it said this under first time home buyers:
•For homes purchased after Nov. 6, 2009: A properly executed settlement statement must be attached to the return (at this time, qualifying taxpayers will have to mail their returns since the statement cannot be submitted electronically)
My son bought his home 9-29-09. Does anyone know if this is absolutely correct?

My husband and I bought the new construction condo last May but didn’t recieve certificate of occupancy. The only thing we have is the residential condominium unit deed and declaration of homestead. Can we file this instead of certificate of occupancy for $8000 first home buyer credit? thank you cery much!

We close on another home April 30 2010 we have already had our taxes for 2009 done and received our refund . My question is you can do an amendment to this still and received the $6500 that we qualify for with this form 5405 is that correct in my thinking…and received another refund/rebate check this year .Thanks

I borrowed money from the seller to purchase my land and build my house. I don’t have any “closing documents” and Missouri doesn’t issue Certificates of Occupancy for rural properties. What I do have is the deed of trust and contracts from the seller. Will this satisfy the IRS requirements?

I was married in 2005, my wife at the time had her own home. We were divorced in June 2009, I purchased my house in Dec. 2009. This was the first time I had ever purchased a home. I was denied because of mortgage interest credit claimed on tax returns when I was married filing jointly. I would like to appeal this, however if I am not going to have a leg to stand on I really dont want to waste my time. Has anyone run into this? I wish I would have seen this coming, like I said, it was this is the first house I have ever purchased.

We filed for the first time homebuyer tax credit on February 15, 2010. We still have not received it. Every time I call to see what the status is, they tell me it is “under review” and give no reasons why. I know that we qualify as I have read and understand the specifics. Our tax accountant also doesn’t understand why its taking three months. Will the IRS pay interest on this money if we get it? Anyone else experiencing this?

Did you receive yours yet, Jenny? I have been waiting three months at this point and when I called to check the status they still said “under review.” There doesn’t seem to be any kind of way to move this process along that I’ve discovered and that’s pretty frustrating.

I qaulify for the fthb credit but have been denided. I called the irs and the phone rep went through what he could and reconfirmed that I do indeed qualify and he resubmitted it. I’ve since gotten another letter wanting anther 45 days for research. they think I own another house somewere. I told them to give me an address, maybe this supposed place I own is nicer than mine, they didn’t think that was funny. Anyways I’m stiull in limbo on it. I filed Feb 2nd and I’m still waiting.

I am going through the same thing. I have to say, the woman I talked to was very nice and told me exactly what I needed to submitt. I am expecting a delay, however I think it will be worth it in the end. I have to respect what they are doing, from what I read about all the fraud from the first round, its no wonder they are being so diligent.

I lived with my sister for several years, as a non paying guest, in her manufactured home, in a park where she paid rent for the space. She developed cancer and died in a very short time (within days of being hospitalized), she made a gift of the mobile home to me, while she was alive, not as part of her estate, so I could sell it –the space rent alone was twice my Social Security disability check. I sold it within a couple of months, but had packed up and was not actually residing there, but betwixt and between while trying to get packed and moved. I sold it and some months later bought a home in another state. I have never owned any home before and qualify on all counts, date, income, etc., but the question has come up as to whether or not I have owned a previous home because of the mobile home my sister gave me, but that I never actually used as a primary residence –at least in so far as I would think of actually living someplace (I spent most of the time before I got it sold trying to keep the park owner from taking a lean out on it in –I couldn’t pay the rent until it sold). So, do you think I’m a first time home buyer or not? I can’t seem to find an answer to this and the IRS is not being at all helpful, so far. Thanks for any response you may be able to give (especially tips on how to get a definitive answer to this).

“The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, IRS Notice 2009-12 allows unmarried joint purchasers to allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.”

The last statement seems to apply to you — that ownership of a property not used as a principal residence does not disquaIify a buyer as a first-time home buyer.

I’m having trouble finding out if i would be considered a first time homebuyer or not. In early 2006 I bought a house with my current fiance, I never made any payments on the mortgage on the home. In April of 2006 i moved out of the home and have not lived there since. I have not made any payments on the home and it has not been my primary residence since 2006, because of the issues with refinancing i have not been able to get my name off of the home as of today. Me and my husband now are buying a home and are closing on it june 14th so my question is would we beable to claim the first time homebuyers tax credit even though my name is still on the other house? Also how would i prove to the IRS that the house has not been my primary residence?
Thanks

Does anyone know? I signed my contract before the april deadline but I am not going to make the june 30th. I currently work overseas as a security contractor working under a contract with the state dept. Does anyone know if that qualifies me for the military extension into 2011, is say foriegn service empoyees and under that on the actual document it say Forein Service support personnel, would that be me? I am not an employee of the state dept. I am just a contractor working under the State Dept.

I amended my 08 taxes August of 2009. It has been ten months since I have applied. Our paperwork has been amended twice, and each time you get amended it takes 12-15 weeks for a reply. Our last paperwork consisted of our final appraisal report which we had to send in replace of the certificate of occupancy. We don't recieve those types of certificates outside the city limits. We are in high hopes to recieve a check within two weeks…Ha! Could it really be true!! The IRS is making sure that we have every piece of paperork correct and who knew it would take three to four months to correct paperwork….but it does….All I can say is make sure you send in any and all paperwork that you can the first time. It's crucial to a timely return.

I amended my 08 taxes August of 2009. It has been ten months since I have applied. Our paperwork has been amended twice, and each time you get amended it takes 12-15 weeks for a reply. Our last paperwork consisted of our final appraisal report which we had to send in replace of the certificate of occupancy. We don't recieve those types of certificates outside the city limits. We are in high hopes to recieve a check within two weeks…Ha! Could it really be true!! The IRS is making sure that we have every piece of paperork correct and who knew it would take three to four months to correct paperwork….but it does….All I can say is make sure you send in any and all paperwork that you can the first time. It's crucial to a timely return.

If my boyfriend and I are buying a house together and its in both our names, do we both need to claim the $8,000 credit together or can just one of us claim it? Also, I already filed my 2009 taxes, to claim the credit do I need to do an addendum? If so, how do I do this and what forms do I need?

Yes, you can however you must file an amended return. This process has been excruciatingly lengthened by the high demand for the tax credit. Most documentation on the IRS website says 8-12 weeks for an amended return to be processed. That has been extended to 12-16 weeks now. It’s sooner than filing in 2010, but it will take some time.

My wife has owned her home for eight years now and we have both been living there. I am not on the title or the mortgage of that home. Recently, I purchased a new home but she is not on the title or the mortgage of that one. We do file taxes jointly. Would we be eligible for the 6500 tax credit?

I am trying to claim the credit on my 2009 tax return for a house purchased in 2010. I originally filed a 1040EZ form because I had no other deductions. Since you cannot claim the credit on the 1040EZ form, is the 1040X enough to amend my original return for purposes of claiming the credit? I assume this is the case, just looking for confirmation.

I filed my 1040 for 2009 on Feb 15 2010. It took 16 weeks for the IRS to process my paper return. The IRS denied my $6500 Home Buyers Tax credit for an invalid reason. They claimed I had a prior home ownership which made my claim ineligable. I had owned my prior residence for 9 years prior to buying the new one on 22 Dec 2009. I sent the home purchase closing statement and 6 years of 1098′s. I claimed the correct amount, used the proper form 5405, entered on my 1040 in the appropriate line and attached the supporting documentation. I am now in the process of writing them following several telephone calls to thier office. I qualified as a long term resident but the credit and it was disallowed in error. All this means is, the credit is not easy to get. I am sure I am not the only one in this situation.. Despite this, my research shows that prisoners in jail have obtained the credit. I am getting the credit or I am going to court. I will get it, it is just not going to be easy !

I purchased a townhome in 2010 and signed a binding contract before May 1,2010 and closed the home before June 30,2010. I’m married filing jointly status and my wife hadn’t signed the purchase contract, but she signed the HUD-1 Settlement statements and we have deeds on our names.
We are first time home buyer, as per 5405 form instructions we need to send both the contract and HUD-1 settlement documents and it says it requires signatures of all parties, but wife didn’t sign the contract and signed only the HUD-1 . Will i get $8000 credit or will IRS reject it on the basis of signatures missing on contract.

Why is it that there are no exceptions to getting the credit regarding buying from a related person? I understand that many people have taken unfair advantage of this buyer credit and so rules were needed for that purpose; however, what about those situations were a person buys a first home as primary residence from a related person through appropriate channels and at market value? I’m failing to see where there was an advantage in anyway..?

This is the case with me; I bought my parents house at market value in March of this year; it was their primary residence, they bought a new home, put it on the market and so I purchased it. I went to submit the paperwork to claim the credit and found out that Im inelgible. This also shocked both my real estate lawyer and mortgage broker as well. I also talked to my accountant and he said had I purchased the home before the extension, I would have got it. This frustrates me greatly that the only difference from me being elgible is that the seller of the home I purchased has the same last name..there are no finacial ties what so ever!!! Any insight regarding this..?

We are in the same boat. We don’t even have the same last name as my husbands grandmother. I don’t know how the IRS would know if we sent in a claim, but I can’t bring myself to risk it. We did however purchase before the extension. Does that mean we could actually qualify?? Either way I think were screwed my friend…

I finally got mine after 6 months. I tried claiming it first through my regular tax return. Got denied, they said I owned a place somewhere when I’ve never owned any property ever and bickered with them for a month. I finally talked to a rep that would at least acknowledge my existence. After setting up some notes and reapplying through a second ammended return and another 10 weeks of waiting I got a deposit in my checking account

My son (first time homeowner) put a contract on a house 4/28, 2010. Problem was it didn’t appraise it until first week of May and it didn’t appraise and owner wouldn’t come down on price so we were released from contract only to find another house right away on May 18,2010. We went to settlement 6/30/2010. My questions is can he claim the credit because he did go to contract on a house before 4/30, it just wasn’t the one he closed on before 6/30. I was wondering if I put both contract in the amended 2009 return and the HUD-1 statement could he get the credit

My family lived in a mobile home located in a park before we purchased our new home November 17, 2009. I had talked with the IRS on three separate occasions and was told that to be eligible for the First Time Home Buyers Credit I had to call the City offices of where I lived and find out if they considered my mobile home to be a permanent structure or not. If they did not consider it to be a permanent structure then I could claim the First Time Home Buyers Credit; the full $8,000 dollars. I was told this by two different IRS representatives. I’m kind of surprised that you were told something totally different when you called them. My husband and I filed our amended return for the full amount based on what we were told by the IRS themselves. If we filed wrong, then it was based on their own faulty information.

My daughter bought a house in April 2010 and tried to claim the $8,000 tax credit on her 2009 taxes. I did not realize that I could not claim her on my taxes for 2009 and as a result, she will not receive the credit, even though she bought the house. Can I refile my taxes, remove her, and she refile hers, claiming herself, and fix the problem so she gets her $8,000?

yes, he can get 8,000 tax return. I have the same problem with your son. I had the contract before April 30, and I closed my house on June 30. That is fine. but if you had the contract after April 30, you wont take it.

Sounds like us! We were sent a letter asking us for specific documentation for our home purchase last October. We sent in the proper docs and then they said we had a prior homeownership, which we did not! What docs did you need to turn in to prove you did not own anything in the past 3 years?

Sooo, I’ve sent responses to a few people above, but noticed that their posts were some time ago…wondering if anyone has any advice on EXACTLY what documentation you need to turn in to prove that you did NOT have a prior homeownership??????? They have denied us stating that we have a prior homeownership, which we didn’t. We had rented the entire 7 years we were together
until Oct. of 2009, as we were waiting for the market to mellow out to purchase. Now we are getting the runaround….it’s very frustrating. I understand that they need to be cautious, it’s just frustrating for us honest folks out there!!!!!!!!!!!!!!!!!!!!

Almost 3 months from the date of my first post here (5/25/2010) I received my rebate – on 8/26/2010 it showed up in my bank account. The number of phone calls, ever more information requests, and so on, was almost beyond belief. Every person I talked to on the phone was very nice and said variations of ‘Oh, I see the problem, it’s an error in (insert host of things like transposed number in SSN, etc.), I’ll fix that right now’… followed by yet another letter from some one else denying the claim for yet another non existent problem requiring further documentation, or harder trying to explain how hard it is to prove a negative –how does one prove they don’t have a husband named ‘we can’t tell you that’ who owns property in some unspecified place (can’t tell you that either)?. But I did finally get the money – they even added on another 106.23 dollars (for which I have no explanation, maybe interest?). While I did get the money I’ve never received any follow up correspondence explaining the extra money, or anything else. Well that’s OK, as I hope never to have to go through that sort of confused mess again. Still it was no doubt worth it, as I did get the money –but I’m left with the feeling it may have been as much serendipity as any actual coherent review process. Good luck to all, I hope your issues get resolved in your favor –but I wouldn’t expect it to be fast…

Does anyone know if I can claim the credit for first time homebuyer? I have never purchased a home but my husband is the Trustee/Beneficiary of his mothers account.
I can’t seem to find any info on it. Thanks

TO Paul I have one better than that! We bought a City-owned home and moved in early because of the delays in closing, (29 Jan 2010). Well, when we did our 2008 taxes, I put in a change of address (didn’t want our refund to go where we weren’t!), so, that was their 1st excuse to review. Now we are on excuse #4. And you are a first time homebuyer and entitled to the credit.

Did you get your refund? I was just disallowed because I owned a single-wide in a park.
Unfortunately, I can’t qualify for the current homeowner credit either because I sold the mobile home over a year ago. Supposedly there can’t be a gap in ownership.

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